A BILL TO BE ENTITLED
AN ACT AUTHORIZING THE REVENUE LAWS STUDY COMMITTEE TO STUDY INTERSTATE TAX COOPERATION TO ELIMINATE MULTIPLE FILING BY INDIVIDUALS WHO OWE INCOME TAX TO MORE THAN ONE STATE.
Whereas, many North Carolina citizens work in border states; and
Whereas, many residents of those border states also work in North Carolina; and
Whereas, in the case of a married couple, one spouse may work in their state of residence while the other works in a border state; and
Whereas, in these cases, the individuals have to file state tax returns with more than one state; and
Whereas, even for lower‑income taxpayers, filing in more than one state can be extremely complex; and
Whereas, taxpayers incur extra costs in employing tax preparers to calculate and file these complex, multiple returns and experience frustration in handling burdensome paperwork; and
Whereas, other states, notably Virginia and Maryland, have solved this problem through interstate tax agreements in which the states cooperate in exchanging and processing tax information, eliminating the need for multiple, complex tax filing by individuals; and
Whereas, such interstate cooperation may be beneficial for North Carolina and its residents; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  The Revenue Laws Study Committee shall study interstate tax agreements regarding income taxes of individuals who work across North Carolina's borders from their states of residence. These agreements generally provide that an individual residing in one state (residence state) and employed in another state (work state) is taxed as if the earnings in the work state were sourced in the residence state; they also provide for the work state employer to withhold residence state income taxes.  In conducting this study, the Committee should:
(1)	Examine agreements, including mutual compliance enforcement provisions, existing between other states adjoining one another.
(2)	Consult with appropriate officials of Virginia, South Carolina, Tennessee, and Georgia.
(3)	Determine whether the goals of reducing taxpayer burden, simplifying tax administration, and increasing taxpayer compliance could be achieved by the adoption of appropriate tax agreements.
(4)	Draft proposed agreements and any necessary enabling legislation to recommend to the General Assembly.
SECTION 2.  The Committee may make an interim report to the 2005 General Assembly and shall make a final report of its recommendations to the 2006 Regular Session of the 2005 General Assembly.
SECTION 3.  There is appropriated from the General Fund to the General Assembly the sum of fifteen thousand dollars ($15,000) for the 2004‑2005 fiscal year to fund the study authorized by this act.
SECTION 4.  This act becomes effective July 1, 2004.